April 4, 2024

AI in the Legal Sector: Enhance Client Services

Nearly 80% of corporate legal departments believe AI can be a game-changer. Let's explore how.

5 min read

Meet our Editor-in-chief

Paul Estes

For 20 years, Paul struggled to balance his home life with fast-moving leadership roles at Dell, Amazon, and Microsoft, where he led a team of progressive HR, procurement, and legal trailblazers to launch Microsoft’s Gig Economy freelance program

Gig Economy
  • Valued at nearly $1 trillion, the global legal services market is prime for digitization, with AI and LLMs streamlining tasks such as contract analysis and legal research.

  • Companies and law firms leverage solutions like Casetext's CoCounsel for AI-powered document management and research.

  • Due to AI, a New York lawyer mistakenly referenced fake legal cases, underscoring the necessity for careful validation and ethical considerations.

Staff writer

From AI to FinOps, our team's collective brainpower fuels this blog.

"AI will replace lower-level clerks in the short term, especially in tasks like discovery, which AI is perfectly built for." - Kyle Balmer, founder of Prompt Entrepreneur.

The rapid advancement of artificial intelligence (AI) technologies is sending shockwaves across various industries, and the legal sector is no exception. The legal services market, valued globally at nearly $1 trillion, is one of the world's largest and holds significant potential for digitization and automation. Legal systems worldwide strive tirelessly to maintain order and peace in society but often need help with voluminous paperwork, leading to cumbersome processes and resource inefficiencies. Fortunately, various AI technologies, such as Large Language Models (LLMs) and machine learning, offer promising solutions to streamline legal tasks.

LLMs, developed by companies like OpenAI, are sophisticated AI systems trained on massive amounts of text data, enabling them to understand and generate human-like text. These LLMs are increasingly deployed in the legal field for tasks like contract analysis, legal research, and document drafting, significantly improving efficiency and accuracy. In a podcast interview, Bennett Borden, Chief Data Scientist at leading law firm DLA Piper, emphasized the disruptive potential of AI, stating, "These new LLMs, I think, are the most disruptive technology since the computer, if not the printing press."

With legal departments projected to triple their technology investment by 2025, the transformative potential of AI in law is undeniable. This article explores various applications of AI in legal work and how they enhance efficiency and transform traditional practices.

Beyond the Gavel - AI Usecases in Legal Departments

AI technologies, particularly Natural Language Processing (NLP) and Machine Learning (ML), are fundamentally changing legal work. NLP models, like Large Language Models (LLMs), enable computers to comprehend human language, allowing them to translate documents, analyze text sentiment, and summarize lengthy legal documents. This enhances the accessibility of legal information and saves considerable time.

Similarly, ML equips legal professionals with tools to analyze vast documents and data in-depth. By applying statistical models, ML can predict legal case outcomes, identify trends in past rulings, and assess the risks associated with various strategies. These techniques ensure data-driven decision-making for legal professionals.

Let's now delve into the practical applications of these AI technologies. We'll explore how AI-powered solutions in legal research, document analysis, contract analysis, and predictive analytics are demonstrably improving outcomes for legal professionals and their clients.

How Orangetheory’s Legal Team Used  Ironclad's AI to Review Documents Faster

The sheer volume of documents legal professionals handle can be overwhelming. From contracts and agreements to legal filings and evidence, sifting through mountains of paperwork, identifying key information, and ensuring compliance consumes significant time and resources. However, recent advancements in AI are transforming how legal teams approach document review and management.

Exploring the AI-Powered Contract Management Cycle: Analysis, Key Term Extraction, Automation, and Continuous Improvement.

For example, Orangetheory Fitness, a popular fitness studio franchise, faced the challenge of standardizing over 1,000 user agreements across its U.S. locations. Charlene Barone, Director of Legal Operations and Strategy, led this initiative and turned to AI-powered contract management software from Ironclad.

Using AI, Orangetheory reduced contract review time to just 30 minutes per document, an 80% improvement compared to manual methods. By leveraging AI to identify redundancies, ensure compliance with state-specific requirements, and streamline standardization, Orangetheory completed the project in nearly half the expected time, saving hundreds of legal team hours.

Beyond time savings, AI-powered document review allows legal professionals to focus on strategic initiatives and client needs.

Dykema Enhances Service With Casetext’s CoCounsel, the Revolutionary AI Legal Assistant

Using AI for legal research is another exciting application within the legal field. This innovative technology leverages advanced algorithms to analyze vast legal documents and case law repositories. While initial concerns existed regarding issues like "chatbots encountering hallucinations," creative solutions address these challenges.

Casetext's CoCounsel is a leading solution that offers powerful legal research capabilities. For instance, Fisher Phillips used it to create a detailed 20-page memo on employment law in Massachusetts quickly and accurately.

Pablo Arredondo, Co-founder and Chief Innovation Officer at Casetext, explained their approach in a Forbes Talks podcast interview:

"We leverage technology but anchor it in truth, using retrieval augmented generation, where AI bases its answers solely on the real case law we provide."

Dykema, a prominent national law firm, has embraced CoCounsel as an early adopter. Myka Hopgood, Dykema's Senior Director of Strategic Legal Innovation, highlights the efficiency gains: "CoCounsel delivers valuable efficiency gains across multiple practice areas. It empowers our attorneys to explore new options for clients while maintaining the security and control they expect."

Integrating AI into the research process streamlines access to relevant legal information, enabling legal professionals to identify precedents and uncover valuable insights. This strengthens their cases, enhances client guidance, and shapes more effective legal strategies.

Redefining Contract Review with LawGeex's AI

Artificial intelligence (AI) fundamentally transforms how legal professionals handle contracts throughout their lifecycle, encompassing examination, interpretation, and oversight. A recent study by LawGeex, a legal technology startup, tested the capabilities of AI against a group of 20 experienced lawyers. The lawyers, including associates, in-house counsel from prominent firms like Goldman Sachs, Cisco, and Alston & Bird, and general counsel and sole practitioners, were tasked with identifying risks within five non-disclosure agreements (NDAs).

The results were striking. The AI achieved an accuracy of 94%, matching the top-performing lawyer. Notably, the lawyers' average accuracy was 85%, with the lowest score at 67%.

However, AI's true advantage lies in its speed. While the lawyers collectively took an average of 92 minutes to review all five documents, the AI completed the task in a mere 26 seconds. Even the fastest lawyer needed 51 minutes, significantly slower than the AI, while the slowest lawyer took 156 minutes.

By significantly reducing the time and resources required for document review, AI empowers legal professionals to dedicate themselves to more strategic tasks, ultimately boosting productivity and delivering greater value to clients. As AI technology continues to evolve, its role in streamlining contract analysis and management processes is poised to become even more crucial within the legal industry.

Blue J Legal Leads with AI for Smarter Legal Forecasting

Artificial intelligence (AI) is changing how legal professionals approach legal analytics, offering powerful tools to predict outcomes and mitigate risks. Blue J Legal, a leading legal tech company, has used AI and predictive analytics since 2015. With its advanced AI algorithms trained on extensive datasets, Blue J identifies patterns and trends in legal data.

"Blue J Legal's innovative AI technology prioritizes predictive analysis, enabling legal professionals to anticipate legal outcomes with exceptional accuracy," states Benjamin Alarie, co-founder of Blue J Legal. Blue J's AI platform empowers lawyers to make informed decisions and strategize effectively by analyzing vast repositories of case law and legal precedents. Clients like Flott & Co., BrownWinick, and Anderson Business Advisors have adopted Blue J's predictive AI solutions to strengthen their legal services.

For example, Blue J Legal uses advanced machine learning to accurately predict reasonable notice periods in employment disputes. It considers 22 factors, mirroring the detailed criteria judges look at in real cases. In the case of Liebreich v. Farmers of North America, they predicted a 15 to 16.5-month notice period, which was validated by the court's decision to award a 15-month notice period. Blue J Legal's groundbreaking AI technology is reshaping legal analytics, providing professionals with precise tools to navigate legal complexities confidently and accurately.

Navigating AI Opportunities, Risks, and Realities in the Legal Sector 

The legal industry stands on the precipice of a significant transformation driven by artificial intelligence (AI). Liz Pinnock of RSM South Africa underscores AI's potential for dramatic reshaping, stating, "The use of AI in the next 5-10 years will likely dominate the legal sector," suggesting a future where AI integration becomes indispensable for legal professionals.

However, this transition presents its own set of challenges. A recent incident involving a New York lawyer using ChatGPT for legal research is a cautionary tale. The lawyer's reliance on AI resulted in a court filing referencing non-existent legal cases, highlighting the risks associated with unverified AI adoption.

This incident exemplifies the legal sector's ongoing exploration of AI, as professionals navigate the balancing act between potential benefits and drawbacks. Legal expert Anna Gressel aptly captures this sentiment, stating, "We're seeing extensive experimentation within the legal industry to determine... what we potentially gain from automating capabilities and what we might lose."

The path toward AI integration in legal practices is paved with promise and caution. It necessitates harnessing innovation to bolster efficiency and accessibility in legal services while meticulously managing the ethical and practical challenges accompanying these advancements.

The Takeaway

We’ve examined how artificial intelligence (AI) transforms the legal industry. The potential of AI to enhance efficiency and accuracy across various tasks is undeniable. 95% of users report time savings on tasks like document management. This leads to faster and more accurate work by lawyers, ultimately improving client services. Also, 75% of legal professionals believe AI will have a positive impact, indicating that its benefits extend beyond efficiency gains, potentially making legal assistance more accessible to everyone. As a result, AI is rapidly becoming an essential tool in contemporary legal practices.

However, it’s also important to remember that integrating AI into legal practices comes with challenges. It’s crucial to ensure data accuracy and that ethical considerations are addressed. Tackling these challenges involves finding the right balance between using new technology and maintaining high standards of legal work. By focusing on these areas, the legal field can fully leverage AI, leading to a future where technology and legal expertise unite to make justice more accessible and fair for everyone.

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